The average amounts of a hospital’s denied inpatient and outpatient claims have increased by 12% and 14%, respectively, with greater denial volumes also accompanying an uptick in payer’s audits, according to a vendor report released this week.
The analysis, which looked at real-world data from the first three quarters of 2025 among MDaudit’s network of more than 1.2 million providers and 4,500 facilities, echoes reports from health system executives and management teams describing heightened payer denial activity as a drag on their revenues.
Specifically, for external payer audits, the billing compliance and revenue integrity tech platform said it spotted a 30% year-over-year increase per customer in total at-risk amount.
The average amount per claim also rose by 18%, according to the report. Among these, 45% of the at-risk amount came from commercial payers with Medicare and Medicaid accounting for 28%.
In the hospital setting, where the average at-risk amount was about $17,000, the top three given reasons for an audit request were coding errors (25%), medical necessity (5%) and billing errors (5%). In the professional setting, with an average at-risk amount of $1,172, requests most often stemmed from missing information (10%), coding errors (10%) and billing errors (5%).
When denials occurred, the average amounts for hospitals were $5,390 in the outpatient setting and $565 in the inpatient setting. Across both settings, the average denied amount for a Medicare Advantage-related claim rose 22.4% to about $1,000, according to the report.
The average amount for a denial tied to a request for information/medical necessity rose by 70%, to $450, MDaudit noted, and telehealth-related denials rose 84%. Denials related to outpatient coding were also a sore spot, rising by 26% from 2024 to 2025—though this was “incremental” compared to the 126% spike a year earlier.
MDaudit, in the report and in an accompanying release, said the trends point to a need for provider organizations to take a proactive position on revenue integrity.
“Reactively fixing denials after they occur or addressing compliance findings after the fact is costly and unsustainable,” MDaudit CEO Ritesh Ramesh said in a statement.
Claims denial increases saw an initial uptick in 2024 and, particularly, during that year’s later quarters, providers and revenue cycle vendors had reported. A September survey of finance, billings and claims management professionals found that the increases had continued into 2025, with more than 41% of providers sharing denial rates higher than 10%.
Mentions of increased payer pushback as an operating headwind have also been mainstays in health system financial filings. And, just this past quarter, for-profit system Ardent Health attributed much of its earnings miss to payer denials “that have proven more durable than anticipated” and said it expected the trend to continue into the end of 2025.